[Updated June 1st to correct ATM information and to add PayPal option]
Recently I had the need to buy and use a UK PAYG SIM card for my phone, so I could make calls and access the web in the UK without the gigantic costs involved with my US SIM card. As I am no longer a UK resident, this was surprisingly difficult, although I did succeed eventually. Although my experience was with Vodafone, a friend had similar issues with Orange.
Buying the SIM was the simplest part: went into Carphone Warehouse, gave them UKP10 and got a Vodafone SIM with UKP5 worth of minutes on it. All I had to do was top it up with more money then add a “Web Pack” (cost: UKP7.50) which would get me data access for a month. I was told to do this online.
Got home to a web browser and went to register my new SIM so I could top it up online. This was not possible, as it requires a UK credit/debit card (which I actually do still have) registered to a UK postal code (which I do not: my card is registered to my US address). I called their phone support, spoke to a human being and was told the UK postcode was indeed required, so online top-up was not going to be possible.
The solution was to find an ATM (in English that’s a “hole in the wall”) with a green “Top-Up” logo, put a card with a chip on it in there (see below), and top-up from that. I had to enter my SIM’s phone number (twice) and so I could add UKP10 to the account. That done I called “2345” which is the automated customer service number and turned UKP7.50 of that into a “web pack” so I was set for a month's worth of web access. Luckily I still have a UK card, else this option would have been unavailable to me: when I tried with my US card, all Top-Up options were absent from the list.
If you do not have a "chip" on your card then topping up can only be done in two ways: in a cellphone store, by handing them cash, or via a web site that will take something other than UK cards. I found this site that claims to accept PayPal for top-ups, but I have not personally verified it. Use at your own risk.
The lack of a smartcard (or "chip") on my US cards was not only a problem in the ATMs for top-up, but was sometimes a problem any time a human being was involved in a card transaction. The USA isn’t interested in reducing card fraud so our cards have no chips on them, but of course every card reader in the UK requires a chip. UK staff are often confused when handed a card with no chip, though they can usually find someone who knows what to do with it eventually. The only other places where my US cards didn’t work at all was at a petrol pump specifically marked as “chip&pin only” and a machines at cinemas to buy tickets.
Other things I learned: once back in the USA there is no way to top up the card (as no ATM offers it) and you can’t call “2345” to switch any outstanding balance from minutes to a web pack as that number doesn’t work when not on the Vodafone network. When I next visit to the UK I’ll know the drill to getting on the web a lot quicker than it took me this time.